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Political economy of IPO underpricing: the evidence from China

journal contribution
posted on 2023-06-08, 12:05 authored by Jian Chen, Roger StrangeRoger Strange
This paper looks at the IPO underpricing puzzle in a political economy perspective, as previous theories have considered only the ‘market economy factor’ in IPO underpricing, and failed to incorporate the ‘political economy factor’ in determining IPO underpricing. This is particularly relevant to emerging markets such as China, where the IPO is not only a process of raising fresh capital, but also one of privatisation. By examining the Chinese case with the political economy perspective, we find that the IPO underpricing is negatively related to the proportion of the shares held by various government organisations. We also offer explanations using an angle of political economy

History

Publication status

  • Published

Journal

Journal of Chinese Economic and Business Studies

ISSN

1476-5284

Publisher

Taylor & Francis (Routledge)

Issue

2

Volume

10

Page range

111-129

Department affiliated with

  • Business and Management Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2012-07-10

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